High street banks will have to pay out up to £9bn after one of the most serious mis-selling scandals in decades. Millions of personal loans and mortgages were sold with unwanted and often unnoticed insurance policies. So-called Payment Protection Insurance was supposed to looking after borrowers' repayments if they ever fell sick or lost their jobs. In reality, customers said they found hidden costs, the policies were difficult to cancel and rarely paid out when they were needed.

Jill Treanor, the Guardian's banking expert, says that the scandal comes just as banks' balance sheets were beginning to grow once more. Meanwhile our personal finance expert Rupert Jones tells you how you can claim compensation if you are among the many people affected.

The scandal will damage the already fragile reputation of many banks, and could entice more borrowers to look at alternatives. We hear from Andrew Giles, director of Zopa, an online personal loans company. He says his "peer-to-peer" lending venture could give the high street opposition a run for its money.

Also this week: the European Union having arranged a bailout for Portugal is now focused on Greece once more. It must choose between another costly bailout or - perhaps unthinkably - a managed default.